NonGrantor Trusts: Income Tax and Other Planning

This webinar provides a technical examination of nongrantor trust income tax planning, including classification of nongrantor trusts as separate taxpayers with independent filing obligations and tax liabilities, and the allocation of income between trusts and beneficiaries through DNI, taxation of accumulated versus distributed income and the avoidance of double taxation; the impact of compressed trust income tax brackets and related distribution planning considerations; fiduciary discretion, and limitations on charitable distributions; detailed computation of fiduciary accounting income (FAI) under governing instruments and applicable state principal and income statutes, including allocation of receipts and disbursements between income and principal; determination of distributable net income (DNI) under IRC §643(a) and its role in limiting deductions and characterizing income carried out to beneficiaries; treatment of capital gains and losses and the circumstances under which they may be allocated to income or principal; analysis of the 2/37% itemized deduction reduction and its application to trusts; use of the §663(b) 65-day rule for post-year-end distribution planning; application of the §643(e)(3) election to recognize gain on in-kind distributions; using LLCs, to influence fiduciary accounting income; and advanced applications of nongrantor trusts in connection with §199A qualified business income deductions, SALT limitation planning, §1202 qualified small business stock (QSBS) exclusions, and anti-abuse rules under §643(f) governing multiple trusts.

Speakers: Christine Pronek, CPA, MST and Martin Shenkman, Esq.